"Brand CEOs": The Case of Martha Stewart

"I am an individual, but I'm a business; Martha Stewart the individual has become Martha Stewart
the brand."1

– Martha Stewart

"Her tabloid celebrity, her status as a walking talking brand name, and her role as CEO of a publicly
held corporation turned whatwould otherwise have been a simple case into a treacherous web of legal
and corporate issues."2

Introduction

Ms Perfectionist", "Domestic doyenne" and a rolemodel for
any businesswoman, is the 'second' most written about woman3 in the world. This
well-known entrepreneur of the United States, who turned the art of home-making and
keeping into a billion dollar business - Martha Stewart Living Omnimedia Inc (MSO),
encountered hard times when she was convicted in a scandal. She was convicted for her
actions, which are considered to be less harmful in a corporate world that witnessed more
serious scandals. Her case called for a rethinking of certain basic notions in free-market
economies - ethics in business, the role of government regulation, and more importantly
the perils and promises of personal branding.

The Making of MSO

Coming fromhumble moorings,Martha Stewart owed her culinary and gardening skills to
her parentage in a working-class family in NewJersey in the 1940s and 1950s. She was one
of the first few women who entered theWall Street in 1968 as a stockbroker with the New
York Stock Exchange. She took to catering business in the 1970s, and honed her skills in
keeping kitchen, arranging parties, designing interiors - the 'Martha Stewart way'.
She made her way into publishing with her first book, Entertaining in 1982, and produced a
variety of books, videotapes, CDs, and television specials.Martha launched her renowned
magazine,Martha Stewart Living in collaborationwithTimeWarner, in 1990, and a television
series by the same name, in 1993. Her regular appearance on televisionmade her a household
name in the US. TheMSO expanded when it went public on the NewYork Stock Exchange
in 1999. The enormous edifice of the company stood on four business segments – Publishing,
Television,Merchandising, and Internet/Direct Commerce, with eight core content areas –
Home, Cooking and Entertaining, Gardening, Crafts, Holiday,Weddings, Pet Keeping, and
Baby and Kids. At 62, Martha states, "I am an individual, but I'm a business; Martha
Stewart the individual has becomeMartha Stewart the brand."4 But, it appeared as though
all her perfection was not infallible when, perhaps in her bid to 'just have more'5 , Martha
went 'penny wise'.

The ImClone Scandal: Martha, Penny Wise...?

Martha Stewart, who made history for the "good things" she showed the world, was in the
news in June 2003 perhaps the first time for the wrong reason. She quit as chairman and
CEO of the company she founded, when she was indicted on the charges of securities
fraud, obstructing justice, conspiracy, and lying. She was accused of insider trading6 for
selling her shares of ImClone - a biotech company, after being allegedly tipped of a stock
sale by her friend SamuelWaksal, the chief executive and chairman of ImClone.OnDecember
27th 2001,Martha sold 3,928 shares for $225,000, thereby avoiding a loss of around $51,000
when the stock tumbled the next trading day following FDA's disapproval of ImClone's
cancer drug, Erbitux.

1]"Why Do People Hate Martha", www.cbsnews.com, March 5th 20042]Daniel Kadlec, "Not a Good Thing for Martha", www.time.com/time/magazine, March 15th 20043]David Walsh, "On the rise and fall of Martha Stewart", www.wsws.org/articles/2004, March 12th 20044]Why Do People Hate Martha?", op.cit.5]MSO’s slogan.6]Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, confidential information about the security. Insider trading violations include "tipping" such information, securities trading by the person "tipped" and securities trading by those who misuse
such information.